Average Credit Card APR |  The bank rate
Average Credit Card APR |  The bank rate

Your interest rate is the price you pay to borrow money. For credit cards, interest rates are usually expressed as an annual rate called the annual percentage rate (APR). This number will vary depending on several factors: the type of card, your credit score, your income, your payment history and more.

If you make it a goal to pay off your balance in full each month, you can save money over time by avoiding additional interest charges. Still, knowing your APR and opting for a card with a lower APR can save you money if you need to carry a balance.

Average credit card interest rate

Your APR will vary depending on the type of card and your risk profile. Generally, better credit means access to a better (lower) APR. Rewards credit cards differ slightly from other cards in that they generally carry a higher interest rate because they offer more value to cardholders than basic credit cards.

Here’s a look at how your APR might vary across different card types according to CreditCards.com Weekly Credit Card Rate Report.

national average 16.13%
little interest 12.94%
Cash back 16.08%
Balance transfer 13.99%
Business 14.16%
Raised 16.78%
Airline company 15.46%
Awards 15.88%
Instant Approval 19.10%
bad credit 25.80%

Credit Card Interest Rates vs. APR

When you borrow money, the interest rate is not always the same as the APR. An interest rate represents the cost of borrowing from a lender. You will see it expressed as a percentage charged against the principal loan amount. In the case of a credit card, this would be the total balance on the card. APR shows you the big picture.

The APR includes not only the interest rate, but also some other costs, such as lender fees, closing costs, and insurance. Fortunately, credit cards don’t usually charge these types of fees, so your interest rate and APR will likely be quite similar. The difference between the APR and the interest rate is usually more apparent with loans, such as mortgages.

Still, it’s a good idea to take a look at the Schumer Box. This is the chart that credit card issuers are required to include in their fine print, and it gives you the 411 on major credit card rates and fees.

Types of Credit Card APRs

APRs can belong to several different categories. Here is an overview of a few different types of APRs you should be aware of:

  • Fixed APR: Your card issuer will not change your APR based on the prime rate, which is the interest rate that banks use as a basis for setting rates for different types of loans and lines of credit. That doesn’t mean your rate can never change. A late payment, for example, may trigger a higher APR, but your issuer must notify you first.
  • Variable APR: Variable APR means that your APR can fluctuate based on various events, including missed payments, an expiring introductory offer, a drop in your credit score, or a change in the prime rate. But your issuer must give you at least 45 days notice before the increase.
  • Purchase APR: The price that applies to your purchases. It only applies to balances that you carry over from month to month; if you pay your statement balance in full before the due date, you will not be charged interest.
  • APR balance transfer: The rate that applies to balances transferred from loans or other credit cards to the applicable credit card.
  • Introductory APR: A low or often 0% APR that credit card companies will offer new applicants for a certain period after opening an account.
  • APR cash advances: This rate applies when you withdraw money from an ATM or a bank using your credit card.
  • APR Penalty: If you miss a due date, this rate could replace your usual APR. This rate is more extreme than typical APRs (can go as high as 29.99%) and can be lowered to the standard interest rate after six months of timely payments.

Tips for lowering your APR

Scoring a lower APR usually requires excellent credit. But if you don’t fall into this category, there are still several ways to get into your lender’s good graces. If you don’t automatically qualify for a lower APR, here are some steps you can consider taking.

  • Compare cards beforehand: Paying close attention to the fine print and going for the card with the lowest APR can save you tons in the long run. So take your time and shop around before choosing a specific card.
  • Improve your credit score: Reducing your balances and making regular on-time payments can help you increase your score and qualify for a lower APR.
  • Take advantage of 0% introductory offers: Consider transferring your credit balance to a card with a 0% introductory promotion. This could help you save money in interest while you pay down your balance.
  • Negotiate with your issuer: Asking for a lower APR can go a long way if you are not already eligible for one. Call your credit card issuer and ask. He might agree to lower your interest rate in order to keep you as a client.

Credit card interest rate FAQs

  • What score do you need to get the lowest APR possible? If your FICO score is above 670, your credit is considered “prime”, meaning good or better. This means that you will become eligible for some of the lowest interest rates. As your score increases into the very good (740-799) and excellent (800-850) ranges, you will be more likely to receive good credit card APR offers from lenders.
  • What is considered a good APR? Any rate lower than the average credit card interest rate, which is currently around 16%.
  • Which cards tend to offer the lowest APR? Here are some of our recommendations for the best low interest credit cards from our partners.


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